The tech stocks sold off due to rising rate fears. However, U.S. stock futures rose sharply in early morning trading on Monday, as Treasury yields retreated from their highs from last week, easing concerns about inflation and that higher rates would undermine equity valuations. Investors have a “rare” opportunity to buy the dip here, according to Mizuho analyst Dan Dolev.
The mobile payment company is coming off mixed fourth-quarter results earlier this week where the company revealed it purchased $170 billion worth of Bitcoin.
Shares finished the week down almost 17% but Dolev believes Square is in good shape for the long run.
The company’s bitcoin-enabled Cash App is “holding up well” and should continue to see growth after some recent deceleration, he wrote. The app allows users to transfer money via a mobile phone app.
“We see overall Seller & Cash App gross profit accelerating in 1Q21,” he said.
And according to Dolev, the company’s products are “highly levered” to any government stimulus if more should transpire as is expected.
“Following the stimulus in March 2020, Cash App gross profit growth accelerated,” Dolev said.
The firm also has a Street high price target of $380 per share and even though the stock sold off this week, Square’s momentum remains firmly well-positioned, he said.
Published at Mon, 01 Mar 2021 14:02:02 +0000